May 8, 2017

The upcoming provincial election has thrust into the spotlight various debates about how to best address poverty in Nova Scotia: wage increases, social programs, tax-based incentives, or a job. Recently, the Nova Scotia New Democratic Party announced that, if elected, it would raise the minimum wage to $15 by 2020. In May of 2016, I wrote a blog about this proposal when the Nova Scotia NDP had introduced a private member’s bill that was dismissed by the Liberal government. At the time, Premier McNeil said he was concerned this wage increase would result in inflationary pressures, and raising the Basic Personal Amount (a non-refundable provincial tax credit) would be a better way to help those in low income. Since the McNeil government included cost estimates for increasing this tax credit in the budget it introduced on April 27, we can assume that the premier maintains his position.

The NS Liberals stated that their tax proposal was designed to “help those who need it the most.” The NS NDP has said that their proposal will lift hundreds of thousands of workers out of poverty. Responses to the NDP platform proposal and to the McNeil tax proposal—some of which I unpacked in my previous blog post—have been predictable and, in some cases, misinformed. In short, the relationship between wages and costs is not as simple as people often make it out to be.